Should fashion retailers bring technology to the fore?
There would seem to be more losers than winners in the retail fashion world at the moment. Could the distinguishing factor be investment in purchasing technology? There is evidence that those retailers who use predictive analytics and point of purchase learning technology improve their margins by as much as 30%.
Ideally, a fashion retailer would be able to predict in advance the precise demand for each individual item, thus ensuring they have sufficient but not surplus stock. A retailer should also be able to react quickly and boost stock when an item is unexpectedly popular, perhaps because it has received some high-profile PR. With such knowledge, sales can be maximised and discounting will be minimised. The technology is out there and it would seem that those who are investing in it (principally online retailers but also the odd high street giant) are reaping the benefits.
Retailers are facing a great number of challenges and, as they look for solutions, they should ask themselves if this type of investment should be on the agenda. If yes, they will need to source and contract with cutting-edge technology providers in the quest for maximum return on their investment.
The time has come for fashion and other retailers to embrace what could become their golden goose – 30% of all their income is lost through poor decisions around what and how much of each item to stock. Divert some technology investment to cracking that golden egg and the margin pressure will be off. The technology already exists in the form of consumer-driven predictive analytics and machine-learning technologies, but it requires leadership to push through change as it involves a (sometimes painful) move away from buying being a largely creative-based discipline. It is disruptive and potentially painful, but it has to be done. If you cannot get leaner, and you want to survive and prosper, you need to get smarter.”
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